Stelios is unhappy with a £139m bid for EasyHotel, but investors aren’t

It’s fair to say that the billionaire founder of EasyJet does not always see eye to eye with the people who run or have stakes in his companies. He famously battled with the board of EasyJet for many years and was regarded by many inside the organisation as a thorn in its side. But as he once put it, he was unlikely ever to step back from or lose interest in the company, because it had made him a billionaire. Understandable, really. This morning brought a continuation of the saga with news of a joint offer to acquire his hotel business, EasyHotel from two investors: real estate specialists Ivanhoé Cambridge and property fund manager ICAMAP, EasyHotel’s largest shareholder. The offer, which was commended by the board of EasyHotel to shareholders, values the business at £139m, and Stelios, who owns almost 30% of it, thinks the offer is way too low. He made it known this morning that he was specifically advising shareholders to take “no action” in response to the offer until the “true value potential” can be “evaluated”. But investors clearly do not agree with him – at the time of writing, the share price for EasyHotel on the Alternative Investment Market (AIM) of the London Stock Exchange had risen 34% to 95p a share from last week’s closing price of 70p, a huge price hike by anyone’s standards. Investors clearly think the sale is probably quite likely to complete. Again it boils down to a divergence of strategic views. The Financial Times reported that Harm Meijer, the MD of ICAMAP (the largest shareholder since October 2016), thinks the offer will provide the group with a big injection of capital to expand further into the European market. Right now the business has 38 hotels on its books, but they are concentrated heavily in the UK market. In a joint statement those two big shareholders said: “[We] believe that the current structure of the Company's shareholder base is ill-suited to attracting the new capital the Company needs to fund its long-term investment programme.” Some of the metrics bear out the notion that a change of direction is needed. The group reported £120,000 in losses in the six months ending March this year, which it blamed on falling values of new hotel premises and the capital required to complete a renovation of the Old Street, London premises. Confidence has not been high – and the share price had fallen by almost a fifth in the last 12 months. Whether or not investors will choose to listen to Stelios or the company board remains to be seen, but it’s clear Stelios is as strident in his views as ever, and with a third of the business in his pocket, he’ll be providing a headache for management for years to come.